RIYADH: Saudi petrochemicals giant SABIC on Thursday reported that first-quarter profit more than doubled to SR4.86 billion ($1.3 billion) compared to the previous quarter as average sales prices jumped.
The Riyadh-headquartered company rebounded from a loss of SR1.05 billion in the same quarter last year. SABIC said that average sales prices increased by 22 percent compared with the fourth quarter of 2020.
“SABIC’s financial performance has seen a positive start to 2021. The first quarter saw rising oil prices and a tight supply and demand balance. These elements, combined with growing demand as the global economy continues to recover, resulted in higher prices and margins for most of our products,” Yousef Al-Benyan, SABIC vice chairman and CEO, said in a press statement.
“Our priorities in 2021 are to remain focused on the key fundamentals. This includes maintaining our financial strength, and excelling in our commitments to operational performance, sustainability, customer focus and innovation. We are optimistic about our future growth, assuming the continued successful rollout of vaccines globally,” he said.
Brent crude oil prices increased by about 39 percent in the first quarter of 2021 compared with the fourth quarter of 2020.
The Kingdom’s petrochemical sector has benefited from rebounding global demand for petrochemicals driven by a rise in consumption as economies emerge from a year of lockdowns.
SABIC Agri-Nutirents, the SABIC unit formerly known as SAFCO, on Wednesday said that its first-quarter net profit surged 39 percent to SR423 million.
Meanwhile, Advanced Petrochemical Company also reported a 64 percent jump in first-quarter net income to SR171 million — helped by a 36 percent rise in polypropylene sales.
At an online press conference on Thursday, Al-Bunyan confirmed that SABIC will work with Aramco on a plan to convert 3 million barrels of oil to downstream industries by 2030, in line with what Crown Prince Mohammed bin Salman said in a televised interview earlier this week.
SABIC and Aramco also announced plans to transfer the marketing and sales responsibility for a number of Aramco petrochemicals and polymers products to SABIC. Aramco acquired a 70 percent stake in SABIC in June 2020.
Abdulrahman Al-Fageeh, SABIC executive vice president — Petrochemicals, said: “By leveraging and optimizing our complementary combined product portfolios we will create a one-stop shop for the benefit of our customers globally, including in strategically important geographies, especially across Asia.”
As part of its aim to help reduce CO2 emissions by as much as 90 percent, SABIC in Q1 signed an agreement with BASF and Linde to develop the world’s first electrically heated steam cracker furnace. In February, SABIC moved up one place to become the world’s second most valuable brand in the chemicals industry, according to the 2021 Chemicals 25 and Global 500 reports published by Brand Finance. According to the reports, the SABIC brand was valued at $4.02 billion and was beaten by Germany’s BASF, valued at $7.29 billion.
SABIC was also named among the winners of the annual Edison Awards, which honor the world’s most innovative new products, services and business leaders. Named after American inventor Thomas Alva Edison, SABIC was honored for introducing a new type of material that has exceptional chemical resistance capabilities needed to enhance the durability of medical devices and equipment housings.